Malls face big changes this year

(Red Huber, Orlando Sentinel )

January 13, 2013|By Sandra Pedicini, Orlando Sentinel

This year will be one of transition for Central Florida's major shopping destinations.

The long-struggling Festival Bay Mall is expected to get a makeover and Orlando Premium Outlets-Vineland Ave will start work on a major new addition where Dolly Parton's Dixie Stampede used to stand. Meanwhile some suburban malls are getting new owners, though what that means for their future remains unclear.

This will all happen against the backdrop of a retail scene that's slowly improving, but still shaky.

"The retailers are very cautious," said David Marks, president of Orlando-based retail-real estate firm Marketplace Advisors. "You're starting to see some signs, green shoots in the housing market, but it takes a while before you develop enough houses to generate demand for a new grocery store or discount department store."

Tourists are generating much of the demand for Orlando's retail, and two centers near the theme parks are preparing to undergo big changes this year.

After years of standing mostly empty, Festival Bay's big renovation should start this year, according to Paragon Outlet Partners, the company that purchased it in 2010. In March, Radbourne Skatepark will open at the space vacated by Vans last year. Toby Keith's I Love This Bar and Grill is also expected to open on the site. Paragon said recently it will unveil the rest of its plans by the end of March. Construction should start this spring and Paragon should open the center by November.

Paragon had originally planned outlet stores in at least part of its project at Festival Bay but the company has backed away from that idea somewhat.

"We still may, but there's a lot of outlet space in the market right now," said Nick King, principal with Paragon.

But Orlando Premium Outlets – Vineland Ave thinks there's room for more. By the next holiday season, the outlet center near Disney will add a dozen stores in a 110,000-square-foot section called The Promenade. Saks Fifth Avenue Off 5th will anchor The Promenade, which will also include dining and an information center.

Less certain is the future of Orlando's struggling suburban malls.

One of them, West Oaks Mall in Ocoee, recently got a new owner - a Las Vegas company called Moonbeam Capital Investments, which bought the mall for $15.9 million late last year.

Moonbeam partner Steven Maksin, a tax attorney, said his company owns about 25 shopping complexes and office buildings around the country.

Maksin said he wants to keep West Oaks as a mall and work on improving its reputation as a crime-ridden area. An Orlando Sentinel analysis of the mall last year showed police responded to more than twice as many incidents there than at Orlando Fashion Square, a similarly-sized mall that is also struggling to attract tenants and customers.

Maksin said he would like to increase the police presence at West Oaks, though he noted that mall spends twice as much on security per square foot than the other malls he owns.

"We have to make the mall safe and we'll do whatever it takes," he said. "If we have to change the tenant base, we'll do it."

Maksin said he has been talking to a college – he wouldn't identify which one – about a possible lease deal, along with Chuck E. Cheese's. A grocery store is another possibility, Maksin said.

Local retail experts are skeptical about the chances of its turnaround.

"I don't know what the fix is for that one," said John Crossman, president of retail leasing and management firm Crossman & Co. "The growth is further to the west. The market's moved away from it. That's a real tough thing to recover from."

UP Development of Franklin, Tenn., is expected to close on Orlando Fashion Square this month. UP said it's too early to talk about its plans, but a representative for its broker last month said redevelopment would be likely. UP has already purchased property near Orlando Fashion Square, including a vacant Toys "R" Us, for $4.5 million.

And in Oviedo, city officials say Oviedo Mall is for sale. CW Capital took over the mall from General Growth Properties in 2010. CW has contracted with a management company called Urban Retail Properties. Under new management, the mall has changed its name (it was originally Oviedo Marketplace), constructeda kids' play area, brought in community events such as food truck bazaars and lured tenants including a Paul Mitchell cosmetology school. Oviedo Mall would not comment last week.

Also this year, Orlando should get its first Container Store, near the Mall at Millenia, while popular Wawa will continue building convenience stores around the region – a half-dozen in the first six months of this year. Fresh Market is expected to open this year at Mills Park on the northwest corner of U.S. Highway 17-92 and Virginia Ave. near downtown Orlando.

At the Florida Mall, luxury retailers Tous and Michael Kors will open this year. Prada, The Buckle, YSL, and Capital Grille are among those thatwill open in Mall at Millenia.

"I think there is some pressure on retailers to continue growth," said Ray Hayhurst, senior director of retail capital markets at Cushman & Wakefield's Orlando office. "I think there are pockets around Orlando that are quite good."